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# OAR Box 1781 Prepped by Ollie Stewart



### Document

Number: 

# 89 ) IV-C-3 Docket Number: 

# A-90-3 7

Printed 10/29/2008 10:46:22 AM Sheet 89 of 142P. 2

Date : 12/7/9 8 To : Ai r an d Radiatio n Docke

t #A-90-3 7 

## U/-C- 3 andarQay( ] From : Davi d Solomon , EPA' s Offic e o f Ai r Qualit y Plannin g an

d StandaMay(MD-12

) Re : Material s fo

r Submissio n t

o the Docket
. Th e attache d materia

l wa s prepare d by EP

A an d on 12/4/9 8 transmitte d to Henr y Nicke l o f th e Utilit y Ai r Regulator y Grou p an d Charle s Goodma

n o f th e Souther

n Compan y in respons e to a12/24/9 8 meetin g wit

h Mr . Goodman , Mr . Nicke l an d EP A staf f i n which physica

l an d operationa l change s to existin g utilit

y unit s wer

e discussed
.

cc : Pa mSmit h (MD-12 )P. 3

Type s o f Energ y Efficienc

y Improvement

s t o Generatio n Unit

s Usin g Fossi l Fuel s thatCould Lea d t o Environmenta

l Benefit s Man y type s o f energy efficienc

y improvement s shoul d b e possibl e withou t triggerin g th e NS R process . Unde

r th e present

NS R rules , i f

actua l emission s d

o no t increas e significantly a s a resul t o f aphysica l or operationa

l chang e t o a

n electri c utilit

y stea mgeneratin g uni t

(suc h a s a chang e undertaken to increas e energ y efficiency) , NS R i s no t triggered
. Althoug h EP

A ha s propose d revision s t o th e NS R rules , thi s essentia l fac t wil l no t chang e unde

r thes e propose d amendments
. Specifically , unde r th e propose d rules , i f

aparticula

r physica l or operationa

l chang e will no t

resul t in asignifican

t increas e in actua

l emission s ove

r abaselin e o f

th e source' s highes t operatio n in th e las t

1 0 years , an

d th e sourc e accept s atemporar y permi t limi t o n it s allowabl e emission s t o ensur e suc h a n increas e wil l no t

occur , NS R wil l no t

apply
. Wher e asourc e increas e it s electri c generatio n becaus e o f th e energ y efficiency improvements , suc

h increase d utilizatio n ma

y caus e actua

l emission s t o excee d baselin e level s b y mor e tha n asignifican

t amount . If

thi s situatio n occurs , EPA' s rule s woul d subjec t th e unit s to th e NS R process . Som

e powe r companie s hav e claime d tha t whe n change s t o thei r

electri c generatio n unit s woul d trigge r NSR , som

e source s wil l no t

mak e th e improvements
. The

y hav e aske d EP A t o conside

r whethe r i t coul d tak e into accoun

t th e possibilit

y o r likelihoo d tha

t thes e energy efficiency improvement s wil l reduc e pollutio n pe r uni t productio n (i.e. , per

MW e output) o r lea d to th e displacemen

t o f powe r generatio n by les s efficien

t unit s tha t emi t higher level s o f pollution
. I n reviewin g thi s situatio n t o see whatcould b e don

e unde r th e CAA , EP

A has examined severa

l situation s describe d below whic h have bee

n represente d t

o us a s th e typ e o f changes whic

h promot e energ y efficiency . T o mor

e full y addres s th e issue , however , th e EP A need s t o understand ho

w th e Agenc

y an d State s coul d b e assure d b y powe r companies thatelectri c generatio n unit s thatbecome mor

e efficien tb y undertakin g thes e type s of change s an

d ru n mor e ar e actually displacin g th e generatio n o f unit s wit h highe r emissio n levels . I

n particular , i

n regar d t o th e typ e of

changes liste d below , th e Agenc y presently lacks information about , an d woul d appreciat

e feedbac k fro m th e utilit

y industr y on : (1 ) ho

w a compan

y ca n guarante e tha

tmor e efficien tunit s wil l displac e les s efficien tunit s wit h highe r emissions ; (2 ) ho w emissio n decreases elsewhere in th e syste m could b e quantified an

d enforced ; (3 ) th e amoun tof emissio n reduction s o r increase s that wil l resul t(of

bot h criteri a an

d climate-relate d pollutants) ; an d (4 ) th e degre e t

o which NS R presently act

s a s a barrie r t

o efficienc y improvements .

• Convertin g t

o Combined Hea

tan d Powe r (CHP

) - Convertin g traditiona

l ga s o r stea mturbine s use d fo

r the generatio n o f

electricit y t o combine d hea

t an d powe r system s allow s fo

r th e conversio n o f

wasted hea

t t o usefu l energ y in th e for mo f proces s steam . A s aresult , overal l efficienc y o f fue l us e ca n increas e fro maround 30 % t o a s muc

h a s 8 0 to 85%
. CH

P i s particularl y applicabl e in distribute d energ y situation s wher e electricit y i s generate d a

t or nea r th e use r an d ther e i s anearb y or

onsit e deman d fo r proces s steam . I

n th e cas e wher

e aCH P 

# IS^^7 . P. 4

t> projec t

replace s a n existin g stea

mboiler , apreliminar

y analysi s o n th e par

t o f th e Agenc y indicate s that , in general , sufficien t reduction s shoul d occu

r a t th e existin g emission s uni t

a s t o provide anet

reductio n i

n emission s overal l a

t th e facility
. Wher e th e new CH

P unit will b e par

t o f th e existin g facility , th e facilit y shoul d b e abl e t o avoi d majo

r NS R revie w b y usin g th e reduction s a t th e existin g uni t

t o "net " th e CH

P projec t out o f NS R review
. Increasin g th e Hea

tRat e o f Uni t- Ove

r tim e electri c generatio n unit s hav e their efficienc y declin e (hea

t rat e increase ) due t

o wear-and-tea

r on th e boile

r an d auxiliar y equipment
. Unti l the curren t shif t t o competition , there ha s bee n n o stron g economi c valu e in maintainin g efficienc y (fue l cost s wer

e commonl

y passe d throug h t o consumers)
. However , wit h th e adven

t o f competition , there ar e analyst s tha

t believ e tha

t generatio n unit s will b e operate d and maintaine d to preven t deterioratio n o f

hea t rate s an d in som e case s t o lowe

r themfurthe

r (increas e efficiency. ) Thi s typ e o f improvemen

t coul d occu

r a t al l type s o f

unit s usin g fossil fuel s - coal , gas , an d oil-fired stea

munits , turbines , and combined

cycl e units
. Increasin g Capacit

y Availabilit

y - Ove r th e las t 2 0 years , th e industr

y ha s bee n improving th e availabilit

y o f unit s fo r generating electricit

y throug h th e yea

r — reducin g th e forced outage s (unexpecte d breakdowns ) an d planne d outage s (tim

e taken fo r "routine " repairs)
. Th

e emphasi s ha s been o n improvin g thos e unit s tha t ar e th e larges t

and/o r mos t efficien t whe n the y operate . Reducin g force

d outage s ca n b e don e throug h better

maintenance , replacin g component s wit h mor e durabl e parts , an d othe r actions
. Shortening planned outage s ha s been dealt wit h b y som e companie s lengthenin g th e period s betwee n maintenanc e an

d increasin g wha

t they d o durin g tha

t time
. Havin g th e bette

r (mor e efficient ) unit s mor

e availabl e fo

r powe r generatio n provide s greate r fleet-wid e energ y efficiency i n som

e areas , in othe r area s thi s ma

y no t occur . A coal-fired uni t

ma y displac e agas-fired uni t

i n th e dispatc h order , becaus e i t i s cheape r to operate , no t

becaus e i t use s les s energy (and a t th e sam e energ y efficiency , acoal-fire d uni t wil l produc e mor

e carbo n emissions)
. Increasin g Tota

l Capacit y - Recently , severa

l powe r plant s hav e figured ou

t way s to increas e th e overal l capacit y o f their unit s - th e amoun

t o f powe r tha t they ca n produc e durin g operation
. Thi s practic e ha s take n o n th e nickname o f "capacit y creep, " wher

e relatively smal

l change s i n equipmen

t a t generatio n unit s increas e capacity
. Again , lik e th e example on capacit

y availabilit

y above , th e powe r industr y woul d b e mos t

incline d t o d o thi s wher

e i t woul d hav e th e greates t pay-off

- th e bigge

r an d mor e efficien t units
. Th e potentia l fo r increase d energy efficiency i s th e sam

e a s i n th e abov e example
. Improvin g Efficienc

y t o Avoi d a n Energ y Penalt y - Som e type s o f pollutio n control , such a s scrubbers , us e significan t amoun t o f energy . Som

e powe r companie s hav e indicate d tha t whil e the y ar e conductin g pollutio n contro l 

# 3P. 5

• i
retrofits , they woul d lik

e to mak e othe r adjustment s to mak

e th e unit s tha

t they ar e retrofittin g whol e - abl e to produc e th e sam e net leve l o f electricit y fo r th e sam e amoun t o f fuel
. Th e improvement s in efficiency ar e initiate d du e t o th e installatio n o f

pollutio n contro l equipmen t an d ma y no t hav e bee n otherwis e undertaken
. Som

e powe r companie s hav e indicate d tha t i f State s requir

e control s o n thei r unit s du e t o th e NO x SI

P Call , they woul d lik

e t o mak e thi s typ e o f improvemen

t without triggerin g NSR
. The trigge r ca n occur becaus e o f

highe r SO x an d P M emission s resultin g a

t th e unit
.



# H